Ageing and Labour Market Development: Testing Gibrat’s and Zipf’s Law for Germany

The aim of the present chapter is to provide an accurate description of the distribution of people in space, taking into account the demographic differences between people. To provide this analysis, we focus on both population (in terms of place of residence) and employment (in terms of place of work) data: we use annual observations regarding population and employment for all German towns and cities in the period 2001–2011. So, the questions we want to answer are the following: does the growth rate of employment/population depend on the size of the cohort? What is the level of employment and population concentration/deconcentration?Are there any differences between these two variables? Are there any differences if we differentiate for age cohorts?In answering all these questions, we will first show the results of the analysis of Zipf’s law and then those of the analysis of Gibrat’s law. The main idea is to verify whether the size of a city (measured by population and employment) and its growth rate are independent for 5-year age groups. To the best of our knowledge, this is the first study which attempts to introduce demographic characteristics (and, in particular, age structure) into an analysis of Zipf’s and Gibrat’s law.